New Oil Capacity Discovered as Iraq overtakes Iran

The Iraqi government has announced that its oil reserves are nearly a quarter larger than they were last time a review was published.

The findings represent the first report on the state of Iraq's oil since Saddam Hussein was toppled after the invasion in 2003 and will present a boost to the incoming government. It is estimated that 80% of Iraq's economy depends on the oil industry so finding new oil will improve the prospects for the future. The announcement comes shortly after Iraq's oil production per day jumped by more than 10% on the previous month to over 2 million barrels per day.

The announcement by the current Iraqi oil minister, Hussein al-Shahristani, that Iraq has a potential 143.1bn barrels compared to the 115bn barrels of previous estimates means that Iraq now has more potential to supply oil than Iran and has the fourth biggest stock in the world. However Iraq still produces far fewer barrels per day (bpd) than Iran as its infrastructure was badly hit by first the war and then the insurgency.

Looking forward Iraq has signed deals with oil extraction companies that could lead to production of upwards of 10 m bpd in 5-7 years putting it in a position to rival Saudi Arabia. This is likely to lead to even greater revenues for the Iraqi Government and more jobs created in this sector. This is dependant on the stability of the country with fears that if the insurgency did start up again then the potential revenue would be wasted.

Sources: BBC, Steel Guru, Voice of Russia